1. To seek Council approval to enter into the draft funding proposal to allocate funds
as a part-contribution to the Government’s initiative to improve the seismic
performance of unreinforced masonry building parapets and facades.

Recommendations

It is recommended that Council:

(i) receives the information contained in this report;

(ii) notes that the Government announced its initiative in providing a
$3million funding package for the mandatory strengthening within 12 months of
the street facing unreinforced masonry (URM) buildings on key routes and that
the initiative includes buildings in Lower Hutt;

(iii) notes that this funding package records the joint initiative with
Central Government and Council paying up to half the cost of securing the
works to a maximum of $15,000 for a URM façade and/or $10,000 for a URM
parapet;

(iv) notes that if the Council does not allocate funding, the mandatory
strengthening requirement will remain but no public funding will be available;

(v) agrees that, consistent with the funding proposal, it will
allocate its portion to the building fund on the basis that the Government
and Council contribution will be on a 2:1 ratio for the 2017/18 year,
currently estimated to be at least $375,000;

(vi) agrees to enter into the funding proposal with the Central
Government to give effect to paragraph (v) above;

(vii) authorises officers to do all things necessary to finalise the
funding proposal with the Ministry of Building, Innovation and Employment;
and

(viii) authorises the Chief Executive Officer to execute the funding
proposal once finalised.

Background

2. On 25
January 2017, the Government announced a $3 million funding
package for mandatory strengthening of the street facing unreinforced masonry
(URM) of buildings on key routes with high foot or vehicular traffic in
Wellington, Lower Hutt, Hurunui and Marlborough. The Government’s contribution
of up to $3million is conditional on Council contribution.

3. The intention is
to increase public safety on these key routes by reducing the vulnerability of
URM parapets and facades in the event of a future earthquake.

4. The Ministry of
Building, Innovation and Employment (MBIW) has provided Council with a draft
funding proposal which sets out Central Government and Council contributions to
the initiative. This is attached as Appendix 1.

5. The combined
Government and Council funding will pay for up to half the cost of securing
work to a maximum of $15,000 for a URM façade, and/or $10,000 for a URM
parapet. Under the funding proposal, the Government and the Council’s
contribution are on a 2:1 ratio.

6. In other words, the costs of the works will be borne by the building
owner funding half, with the balance split between the Government and the
Council on a 2:1 ratio. For a building owner receiving
the maximum amount of $15,000 from the URM buildings fund for a façade, a
$10,000 contribution will come from Government and a $5,000 contribution from
the Council.

7. The Government
funding is contingent on the Council also allocating funding. If the Council
decides not to allocate funding, the mandatory strengthening requirement
remains but no public funding will be available to the building owner.

8. Initial analysis
shows there are about 15-80 affected buildings citywide. Of these, 50 are
heritage-listed or contributing to listed heritage areas.

9. The final number
of affected URM buildings will depend on whether they lie on a key route with
high foot or vehicular traffic or on an emergency route. Council officers have
provided information to the Government on the streets that should be included
with the Government having a final say on which streets are to be included in
the legislation. Officers are currently compiling the list of potentially
affected buildings but this list will not be able to be confirmed until the
Government announces the streets to be included for Lower Hutt. There is a
relatively short timeframe to confirm the affected buildings before legislation
‘goes live’.

10. This initiative
will be proposed as an Order in Council made under Hurunui/Kaikoura
Earthquakes Recovery Act 2016.

11. The proposed Order in Council is expected to include the list of the
approved streets, types of buildings needing to be secured and the timeframe
for that work. The timeframe is expected to be one year from the date the
building owner is notified by the Council.

12. MBIE is leading
the development of the technical matters underpinning the initiative as well as
the process for implementing the initiative. Council officers have been asked
for their views on these matters.

13. The proposed
Order in Council will be considered by the independent Hurunui/Kaikōura
Earthquakes Recovery Review Panel before taking effect.

14. If the Order in Council is made, it is
likely to come into force in mid to late February 2017. After the Order in
Council takes effect, Councils will issue notices to certain building owners
under section 124 of the Building Act who will then have 12 months to complete
the work.

15. Ministry for
Business, Innovation and Employment guidance on securing facades and parapets
will be available from late February 2017. Council officers plan to send these
out to affected building owners together with the notice to secure their
facades/parapets.

16. Work covered by
the Order in Council will be exempt from the requirement to obtain Building
Consents and Resource Consents. The proposal does not allow the partial or
full demolition of buildings.

17. The initiative is
focused on securing URM parapets and facades rather than strengthening.
However owners of URM buildings subject to this requirement may opt to
strengthen rather than secure these elements. They will still be eligible
for funding support for work fitting the initiative criteria as long as the
work is completed within the timeframe required to access the fund. Council
officers will be working closely with owners to encourage them to take a long
term view with a permanent strengthening solution where possible rather than a
temporary securing solution.

Discussion

Risks and issues future consideration

18. The initiative exempts qualifying work from obtaining a Resource
Consent, the normal regulatory mechanism for protecting heritage from
inappropriate development. Without this process in place there is a risk of
work being carried out which causes a loss of heritage values. However, MBIE has
sought to minimize this risk by producing technical guidance documents which
includes specific heritage building methodologies. Further, as part of Councils
role in implementing the intiative, Council officers will provide targeted
guidance as required.

19. If
the building fund is oversubscribed, the Government may decide to allocate
additional funding, for example if demand exceeded the current funding
available. Based on the current co-funding criteria the Council would need to
consider approving additional funding.

20. Under
the draft funding proposal, MBIE is managing the likelihood of oversubscription
by selecting streets on “key routes”. Any further contributions from the
Government are conditional on the approval of additonal appropriation. MBIE
will monitor the number of facades and parapets required and will provide early
warning to Councils if there is a prospect of additonal funding required.

21. The
key routes are those which have these features:

a. High pedestrian routes/areas, i.e. areas where people are
concentrated for social activities (cafes, theatres, malls etc), and are used
for public transport (public transport hubs or stops); or are high foot traffic
routes;

b. High vehicular traffic routes, i.e. arterial routes, relevant
sections of state highways, or key local streets; heavy use bus stops; busy
intersections where buses may be stationary; or areas of high concentration of
vehicles during peak hours;

c. Emergency routes, i.e. routes likely to be used by emergency
services.

Other EQ related developments

22. This initiative addresses one aspect of strengthening required for
earthquake-prone buildings. Government legislation passed in 2016 is due to
come into force this year introducing a risk based framework to enforce
national time frames and procedures for addressing earthquake-prone buildings.

- This will shorten strengthening timeframes for priority buildings.
The majority of earthquake-prone buildings will need to have their
strengthening completed within the next 10 years.

- Officers note that the Council’s Built Heritage Incentive Fund
(BHIF) exists to assist building owners with strengthening heritage building
(see information below).

Consultation

23. Officers have met
with the Jackson Street Programme Co-ordinator to discuss the Government’s
initiative.

24. Officers are also
planning to organise meetings with interested building owners with
representatives from MBIE, Heritage NZ and other relevant agencies in Jackson
Street and other areas.

Publicity matters

25. Since the
Government’s announcement, the Minister and MBIE have taken the lead in
communicating the initiative to the public. This is because until streets are
confirmed Council officers are not going to speculate on the streets and
buildings that may be affected. This would be unfair to the Government process
and potentially affected building owners. Officers have been liaising with
MBIE staff on communication issues and the Council has supported the Government
initiative publically by attending the initial press conference.

26. Council officers
will commence sending out s124 notices to affected building owners from the
time the legislation is passed. This will include a guideline document
prepared by MBIE to help building owners understand the process. Prior to
sending out the letters, officers also intend to call affected building owners
to give them a heads up.

27. Council officers
will work with the Minister’s office and MBIE to ensure as little time as
possible between the Government’s announcement of approved streets and letters
being sent to affected building owners. Communicating with affected building
owners and ensuring they have relevant and sufficient information will be a
priority.

28. Information to
answer potential questions will be available on the Council website and the
customer contact centre and the building team will be prepped accordingly so
that phone calls can be answered effectively.

29. Media enquiries
about the Government’s initiative will be answered by MBIE and the Minister’s
Office. Media enquiries about affected buildings in Lower Hutt and Council’s
support for the Government’s initiative will be answered by the relevant
officers and the Chief Executive. It is likely that the Mayor may also be asked
for comment and he will work with Council’s communications team to respond.

Legal
Considerations

30. Other relevant
aspects of the draft funding agreement include allocation of responsibilities
between MBIE and the Council. Note that MBIE will administer the fund and will
liaise with building owners once the owners submit their URM fund application.
The Council will be the main point of contact once we send the notice to the
building owners to secure their buildings and until the section 124 notice is
removed from the building.

Financial
Considerations

31. Payment
will be made to building owners after the strengthening has occurred and been
signed-off.

32. Given the current estimates of 15-80 affected buildings, officers
have made a provision of $375,000 as Council’s contribution to the fund in the
2017/18 draft budget. Note that this amount will change as the number of
affected buildings is confirmed. Officers are still working to confirm the
numbers.

33. Most
of the work is expected to occur in the 2017/18 financial year.

35. Building owners can apply to use the BHIF for the securing work
under the URM initiative provided they meet the BHIF criteria.

36. Council’s
BHIF is designed to help owners preserve, restore and protect the heritage
values of their buildings or structures. The fund is intended to be used for
professional services (e.g. structural strengthening reports, maintenance
reports, conservation plans, archeological site assessments, conservation work
specifications or supervision work and technical advice), or emergency physical
work. It only applies to buildings registered by the Historic Places Trust or
that contribute to a heritage area or are listed in the District Plan. The
qualifying buildings must have high public access and/or visibility from public
places.

Other cost
impacts

37. Council officers will need to consider how costs involved in
implementing the initiative are managed, for example the costs of Traffic
Management Plans, and the issuing and signing-off of notices. However these
are expected to be fairly minor and can be covered under existing budgets.

Other
Considerations

38. In making this recommendation, officers have given careful
consideration to the purpose of local government in section 10 of the Local
Government Act 2002. Officers believe that this recommendation falls within the
purpose of the local government in that it is a central government initiative
aimed at addressing public safety issues in the event of an earthquake. It
does this in a way that is cost-effective because it incentivizes and
simplifies the process for building owners to fix URM facades and parapets.